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What to know about Bitcoin ETFs and Galaxy Digital
Here are a few of the latest things to know about Bitcoin ETFs that have been filed and involve Galaxy Digital.
In a surprise move, an ETF that Galaxy Digital was involved in has been withdrawn. According to Barrons, Invesco has just cancelled its Bitcoin Futures ETF that was scheduled to be approved. This Invesco ETF was expected to go live this week. So it seems odd that they pulled the plug just days prior. “We have determined not to pursue the launch of a Bitcoin futures ETF in the immediate near-term; however we will continue to work in partnership with Galaxy Digital to offer investors full shelf of products with exposure to this transformative asset class, including pursuing a physically backed, digital asset ETF,” the company said in a statement.
Galaxy Digital itself has filed for 2 ETFs that I am aware of. These are there own products, and unrelated to the Invesco ETF. One is a futures ETF, which many expect to be approved and go live in a few weeks. The other was a spot ETF, based on the current price of Bitcoin, unlike the futures ETF. I believe that first spot ETF filing was either rejected or pushed off by the SEC to a further review date. Also note above that Invesco states they want to pursue a spot ETF with GLXY.
The futures ETF they filed for should go live next month. While not as desirable as spot, it is still a positive for those looking for more easy on ramps for the average investor. Futures-based ETFs sometimes have issues with something called contango, which is the price discrepency between the futures market and the underlying assets they track, and bitcoin is notoriously volatile.
Some are cheering any ETF finally being approved by the slow to act SEC. Others think these vehicles and Wall Street involvement is not good for crypto. However, that ship has already sailed, the old school traditional people and companies are moving in and have been for years. So it is what it is at this point.
Valkyrie Investments and VanEck are likely to be cleared to roll out their own funds this month, followed by Galaxy Digital, AdvisorShares, Bitwise, BlockFi and ARK Investment Management in November and December, analysts said.
Galaxy Digital is the sub-adviser to the CI Galaxy Bitcoin ETF, which trades in Canada on the Toronto Stock Exchange or TSX.
How does this affect Galaxy Digital and its Stock?
GLXY wants to be in the ETF space. They want their own funds and to be involved managing other funds. There is money to be made, even in the lower cost ETF space. Don’t forget that Galaxy Digital wants to be the Goldman of crypto. They are making markets, providing tools and services, and managing money and crypto. It would only make sense for them to be heavily involved in all the traditional market type services, like ETFs.
They can make money on different sorts of fees, managing their own funds, as well as advising and providing custody of assets for others.
The total revenue that is generated by most ETF funds can be found by multiplying its total assets under management by the expense ratio. But not always, some expense ratios float with the ETF fund, while a few even charge other fees, similar to mutual funds.
If you use the basic equation above and apply it, then the ETF industry is probably generating somewhere around $15 Billion as a rough guesstimate.
What do you think of the new Bitcoin ETFs that are coming? Let me know. To read more about GLXY stock, click here.
As always I am not a professional and this is not advice.